Flatow v. Iran

Stephen Flatow (plaintiff) sued the Islamic Republic of Iran (Iran) (defendant) for wrongful death after Flatow’s daughter was killed by a terrorist’s bomb on the Gaza Strip. Flatow brought his complaint under § 1605(a)(7) of the Foreign Sovereign Immunities Act (FSIA), which extended federal subject-matter jurisdiction over foreign states whose officials or agents materially supported a terrorist act that resulted in personal injury or death. The district court granted default judgment to Flatow and awarded $247 million in damages. Flatow sought to enforce the judgment against assets in the US that Flatow claimed were owned by Iran, including properties in Maryland owned by the Alavi Foundation (Alavi), a New York-registered nonprofit and nonparty to the case. Flatow served writs of execution upon the Alavi properties, and Alavi moved to release the properties from levy and quash the writs of execution on the ground that Maryland law did not allow a judgment creditor to satisfy a money judgment with a levy against a third party’s property. Flatow argued in response that the judgment could be satisfied against Alavi’s properties because Alavi was a de facto instrumentality of Iran and subject to Iran’s day-to-day control, as evidenced by changes and activities within Alavi that aligned with Iranian political maneuvers, IRS documentation, and experts and US officials who expressed suspicion regarding Iran’s control of Alavi. Alavi responded to Flatow’s claims with documentation demonstrating non-nefarious reasons for the changes within the organization and demonstrating that the IRS had ultimately lifted its concerns regarding the relationship between Alavi and Iran.